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tv   Nightly Business Report  PBS  July 5, 2013 7:00pm-7:31pm PDT

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this is "nightly business report" with tyler mathisen and susie gharib brought to you by -- >> sailing through the heart of historic cities and landscapes on a river, you get close to iconic landmarks, to local life, to cultural treasures. viking river cruises, exploring the world in comfort. good news on jobs surprisingly strong employment reports sent stocks sharply higher and bond yeields, too. >> smart phone slow down? samsung sends a warning to investors and across the entire industry. the market may have reached a saturation point. leaps and bounds, from the agony of the seats to a profitable business by building a better ballet shoe. that and more tonight for
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"nightly business report" on friday, july 5th. good evening everyone. i'm tyler mathisen along with sue herrarah. susie gharib has the night off. the monthly jobs report from the labor department is arguably the best and clearest indicator of the economic state of the union and today's numbers suggest the union is reasonably strong and possibly getting stronger. employers added 190,000 new jobs in june, for more than forecast for april and may were revised sharply higher. because so many more americans jump back into the market to look for a job, the nation's unemployment rate held steady at 7.6%. more on the good news about jobs in june and what it might mean for the economy. >> reporter: seth is doing something this month that thousands of business owners across the country are also doing, hiring new workers. >> a qualified person for me is someone whose happy, naturally,
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someone whose active, someone whose reliable and trustworthy and customer focus understands what the customer is looking for. >> reporter: signs that the hiring surge in store fronts and shopping malls provide testament to the government numbers. a lot of new jobs came in traditional summertime industries. 52,000 hired in food services and drinking places and 19,000 in amusements, gambling and recreation, according to the department of labor. but private sector employment surged by 202,000 as government employment declined and more people like kevin facing unemployment have reason to be optimistic. >> i'm feeling good. i'm feeling confident i'll be employed again. i don't have a dire outlook on my future. >> reporter: to the experts, the data gives similar hope. >> the unemployment rate is high, there is room to improve but it's really heading in the
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right direction in a sustainable and convincing way. >> reporter: some think there could be threats to the u.s. economy looming. >> we're doing really much better here in the united states but in europe they are in recession and the emerging world is disappointing. growth slowed in china and india, russia, brazil. so that's doing some damage to our expert growth. >> reporter: for wall street the news means the fed is more likely to ease off the liquidity injections. the market seems ready to celebrate the good news. and still ahead in the program, as college graduates enter the job market with increasing debt loads, many are asking whether their degrees are worth it. we'll explain that coming up. stocks rallied wrapping up the second straight week of gains but the session had plenty of drama. the averages began sharply higher on the report but
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investors fold stocks mid morning turning the major industries negative for a time on concerns that the good news about jobs could drive the federal reserve to pull back a little sooner e perhaps than expected but then cooler heads prevailed and stocks closed to the upside after an up and down day the blue chips surged and the nasdaq up 35 and the s&p 500 added 16. as investors bought equities, they sold bonds. the yield on the ten-year tr treasury note closed on a two-year high. gold lost luster following 3% on a stronger u.s. dollar. the political crisis continues over in egypt. deadly clashes broke out as thousands of protesters took to tahrir square. mohamed morsy and his muslim
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brotherhood party battling the police and military forces. a state of emergency in the canal region ramped up concerns about oil supplies out of the middle east, sending oil prices sharply higher. crude shot up nearly $2 today. closing north of $103 a barrel and that's a fresh 14-month high. federal officials approved a three-day deal in which japan soft bank asquares some of next tell. the fcc's actions are the final step before a 78% stake of sprint becomes the biggest ever japanese acre session of a u.s. company in a deal worth some $21.6 billion. shares of samsung took a hit today in south korea where they trade on concerns over sales of samsung's galaxy s 4 and some
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are concerned the rapid growth in the high-end cell phone market may be slowing. whether the cell phone market itself is saturated. jon fortt has more. >> reporter: every great run must come to an end and it's beginning to look for that way in mediocre growth in the smart phone. today projected the operating profit for the second quarter would fall short of analysts' expectations. samsung says expect $8.3 million versus $9.3 billion observers hoped for. it's like apple stock. samsung stock took a dive in the past month to levels they haven't seen since last september when apple stock rising began. smart phones are a huge market but doesn't seem to be a lot of room for growth at the high end. roughly 60% of u.s. adults have one already.
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>> for samsung, their best days could be behind them. frankly, apple's best days are behind them, as well. it just becomes more of a question of large numbers and saturation and pennation of the market opportunity. >> reporter: the same thing with the ipod five years ago after being hugely popular for four years, profitability begain to wooen. the difference this time, smart phone sales are so enormous they turned apple into one of the most valuable companies on the planet. apple co-founder and ceo started with a modest prediction. >> we think what we've done is to reinvent the phone, and completely change what your expectations will be. >> reporter: so what is next when the pc market is saturated, we got itunes from the ipod and music market saturated, we got a new generation of smart phones. the next wave could be services that connect to all those
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phones. for "nightly business report," i'm jon fortt in san jose. in the meantime, rival smart phone maker htc reported dismal earnings with profits tumbling 83%. the giant reported strong sales for it's flag ship htc 1 phone over the past three months, but analysts predict future sales will be cliffed by new products by apple and samsung. another tech giant dell is in a kind of fight for it's life, at least it's life for a popular company. michael dell said he won't sweeten the $24.4 billion bid to take the company private. he's evidently willing for now to take his chances his bid will win the favor of share holds and the firms that advice institutions on how to vote their shares. a rival bid carries a higher per share price. that offer for a portion of the company would leave a chunk of
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dell still trading on the public markets. investors didn't like the news today and dell shares closed 2% lower today. amazon.com, the world's largest online book saler is making news onbook authors and publishers aren't happy about it. after years of lowering prices on books to under cut the brick and mortar competitors, amazon is so dominant it's offering smaller discounts on some books a or slower settling titles, in discounts at all. as college costs skyrocket, jobs hard to come by, many recent grads are wondering are their degrees worth it? but first, how the international markets closed today.
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with worries about 1 trillion in outstanding student loan debt a lot are wondering if college is right for everyone, or if for some a college education is worth the money at all. hampton pearson has more. >> reporter: when brandon anderson graduates georgetown university next spring with a sociology degree, he'll leave college with $25,000 in student loan debt for a job with a $26,000 a year salary but the former high school drop out that turned his life around said a college diploma is worth it. >> if we want to make something of ourselves in this day in age or if we want to become happy, we want to -- if we want a better job, if we want to be able to take care of our families the way the american dream promises, education is certainly worth it. >> reporter: for devin it's a different story. it's been more than a decade since she graduated from the university of maryland and a medical coordinator in
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baltimore. her second thoughts about the value of her college education go far beyond the $5,000 she still owes on student loans. >> it seems like your bachelors degree is like a high school diploma. it doesn't open any magical doors. it doesn't give you a free pass to gain unemployment -- employment. it's another piece of paper. >> reporter: at just under a trillion dollars, student loan debt is higher than auto loans and credit card debt. the 2007 recession was the game changer, accelerating defaults for graduates fuled by skyrocketing college costs and stagnant jobs in the workplace. advising republican and democrat presidents on education and unemployment policy. >> the reason to go to college is so you can live more fully in your time but you won't if you live in your parents' basement
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or under a bridge out of a shopping cart. college is so investment it needs to be treated as an investment. it's the first big investment young people make in their lives. >> it goes beyond the impact over the doubling of interest rates for some student loans. some economists see a vicious cycle, rising college cost, the debt burden and an anemic job market creating graduates to get into the economic main stream. for "nightly business report," i'm hampton pearson in washington. the rising yield on the ten-year treasury created winners and losers today and that's where we begin the market focus tonight. investors took a second look at the regional banks today and zions bank upgraded to buy, one of several winners. citi group raised 2014 and 2015 east mitts and zions up more than 4% on higher than usual
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volume. the other end of the market dial, lenar led home builders lower as they were concerned rising treasury yields would impact the affordability of new homes closing at $33.93. lemon shares fell as dennis wilson plans to sell 3.4 million shares. wilson held 10 million shares, about 9% of the company. shares of lululemon closing at $63.55 but the shares down more than 16% year to date after the yoga pants problem. buffalo wild wings touched a new high as the stock was up graded to buy from hold. raising the price target to $117 a share. why you ask? lower corn prices and record supplies of wings. buffalo wild wings closed at
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$101.24, up almost 2%. the market monotomorrow says it increases the odds the fed will pull back on stimulus this fall. he also says the keywords for the financial markets is visibility. he's wayne kaufman, chief analyst with rockwell securities. good to have you with us. >> nice to be here. >> recent days, worry about the dialing back of stimulus trickled through the markets, stocks generally went down, but today on the good jobs news, they went up. why? >> well, you know, it was great to see, but first of all, let's keep in mind this has been a low-volume week and today was a low volume day. the effect was probably exaggerated by the low value. this is the big daddy of economic reports. the economy is 70% consumer oriented and the consumer has to have jobs. so when we see the job picture
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improving, maybe it's too soft for some but it is improving, well that's an important thing and gives people confidence and consumers will have money in their pockets with which to buy things. >> let's take questions that have been written into us from viewers and howy wrote in about ge. he says the stock seems to be stuck in the mud. i cannot understand how a company so diversified and productive lost favor with investors. what do you think? >> i think he hit the nail on the head with the question. i'm neutral on ge. there is just nothing exciting. they don't have a lot of revenue growth. they probably will trade with the market. i'm knew tret neutral on the na >> one wants to know about hewlett packard. she's retired and wants you to discuss the future of them. >> i'm a fan of hewlett packard. they surpassed analysts for the
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past two quarters. the chart is bullish, which means the stock is going higher. the test on hewlett packard will be should the stock go up to the $30 area? right now it's over $25. should it go to $30. there is resistance there. if it breaks there, that will be great for the chart, but i think people are expecting that the pc business, which has been soft, everybody knows, will make a nice recovery in the second half of the year and they have been beating estimates in spite of weak pc business, so i think that speaks well for them. >> on to tom who wants to know about ford stock. they have had great car and truck sales. >> i'm a fan of ford. the stock broke out nicely making new highs. it, too, has a bullish chart. ford, like hewlett packard has been beating estimates but done it for five quarters in a row.
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that's very good. domestic auto sales are great. ford is doing very well in china. so they are really hitting on all cylinders and i think there is more upside for the stock. >> margaret in redwood city, california. she's interested in 3 d printing. she says i work at stanford and surrounded by people inviting including 3 d imaging for healthcare. what do you think of this? >> there is no doubt the 3 d group has been one of the most exciting things to come along in technology or in the economy. there -- it's just potentially a game changer and like all groups that catch the imagination of the public, it becomes highly valued. so i view all of these stocks -- there's three others along with ddd. there is prlb and ssys, i view them all as trading stocks until this becomes a more mature
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industry where we can see a little further down the road. but it's definitely a very exciting space to be in. >> wayne, do you have any disclosures to tell you about, whether you own any of these or your funds do? >> no, i do not and rock well does not own any, either. >> thank you, chief analyst with rockwell securities. i'm betting this is something you've probably never given much thought to. is a fish worth more dead or alive? and why should you really care? that's the debate between commercial and recreational fishermen but also at the heart of it, an economic question. steve gives us a lesson in opportunity versus cost. >> reporter: an estimated 12 million people in the united states fish recreationally, including me. to keep our hop by from going belly up, we need healthy fisheries like this one in pine island, florida. to tackle the problem marine
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biologists like adams who weren't getting through finally got their attention by turning to the economics of fishing for lev ration. fishing generates an estimated $30 billion of economic activity in america every year. in california, texas and here in theunshine state, it's big business. >> recreational fishing in florida, fresh and salt water is worth about the same or more than the citrus industry. >> reporter: nationally recreational fishing provides the same number of jobs that forpd or general motors and worth more than american express and add s up to more tax revenue than 11 states combined. nobody really knew that. what people knew is what commercial fishermen told them, reducing harvest could cut jobs. then the biologists got smart. they hired economists to do studies and gauge the economic impact of healthy fisheries. bottom line is the economist is found fish are worth more alive
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than dead. if you save the fishery and save the habitat. it could mean more jobs, more growth and more tax revenue. due to past practices, florida lost close to 50% of the shorelines, home to many species worth thousands of dollars. a guy travels to florida to fish for a big fish but the existence begins with the decision not to destroy a man grove. >> you don't have to pay to build roads, pay to have a big police force, run sewer and that stuff, as long as the habitats are healthy, it's basically free. >> reporter: for "nightly business report," i'm steve liesm liesman. coming up, meet the woman that put a modern twist on an age-old shoe and turned it into a successful business but first how treasuries, commodities and currencies faired today.
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>> good news this evening for commuters in san francisco. rail service is scheduled to resume in time for this evening's rush hour after striking unions agreed with the bay area known as bart to extend a labor contract for 30 more days while both sides continue to meet at the bargaining table. well, you may want to take bart tonight if you're driving a 2013 chrysler mini van. the auto maker is recalling 2 82,000 of them to fix the software of the passenger side air bags. affected models are the car va van, town and country and caravan. steven a cohen, the
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government doesn't have enough evidence to bring charges against cohen in the hedge fund company he runs sac capital adviso advisors. the deadline to bring charges tied to a five-year statute of limitations will likely pass without any action. no comment today. finally tonight a new york city untself-employed woman, determined to build a better ballet shoe. for years ballerinas suffered the agony of the feet. >> there's, i guess, the initial burning, blisters, and then throbs. >> dancer eliza remembers spinning in pain, as well. >> coming down from a jump and having it hurt and hearing a loud noise changed the
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experience of class for me. >> she was shocked to see ballet company spend thousands of dollars on shoes that wore out after one performance. so she comes from dancers and inventors decided to take matters into her own hands. >> i bought a pair of every brand of point shoes and cut them open and i couldn't believe what i found inside. one of them had a toe box made out of newspaper. i was really outraged that dancers who are serious athletes were expected to perform in such bad equipment. >> she spent eight years developing a patented high point shoe. she and her husband launched a company in 1993 but despite the shoe's comfort and durability, they were not an instant success. >> ballet is a very traditional art. there was a scandal the first time a ballerina wore a ftutu o
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stage. others needed to be convinced. >> reporter: she stuck to it and the shoes began to win over the hearts and the soles of prima ballerinas. soon, other ballerinas came calling. claire davisson is an apprentice. >> they are comfortable, consistent and look really nice. i feel like they compliment my work and point work and feel really good in them. >> reporter: the shoes retail for $115 a pair. while some dancers favor traditional brands, abt soloest christi has been wearing them since she was 15. >> you have a lot of choreography to remember on stage, and the last thing you want to worry about is your shoe going to break? does it fit right? does it look right? will it last throughout the entire ballet? to have that peace of mind for me is key. >> reporter: the shoes are made
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in a solar powered factory in massachusetts. most of her sales staff is in new york city. >> almost everybody that works here is a former or current dancer. so we know how to speak to customers and dance teachers in their terms and language. >> reporter: today the shoes are shipped to 82 countries and 200 major dance companies and sales are growing by leaps and bounds, up double digits every year two. decades after lunching her company, eliza measures her success, not just in dollars but in feet. >> when you see these stories about people who do this, most of them take years to reach success. it's not get rich quick. she started 20 years ago. >> what a terrific story, that art and sport blended together. it's fantastic. >> it is. >> my feet hurt just watching. >> need less to say, mine zy is
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>> i'm tyler mathisen. have a great weekend, everybody. hope to see you back here on the evening. "nightly business report" has been brought to you by -- >> sailing through the heart of historic cities and landscapes on a river, you get close to iconic landmarks, to local life, to cultural treasures. viking river cruises, exploring the world in comfort.
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>> we have, in washington today, a government that is absolutely incapable of resolving the problems that are confronting the nation. what has happened here is it really goes back to the money that has become the overriding and the driving factor in politics. >> the slush of money that have come in and the fact that you can now have unlimited amounts of dollars flow in to campaigns without any even disclosure. the citizens united supreme court case, which basically took off all the campaign finance restrictions. i got to hope and pray that the supreme court realized they muffed on that one. >> it used to be that those of us in the middle who prided

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